Restructuring of Denel Showing Encouraging Results

By Garth Calitz

Denel, South Africa's national defence tech group, claims to be bouncing back from a really tough period and feels it is gradually getting back on track. Thanks to strong support from its new shareholder, the Department of Defence (Read the SA Taxpayer), Denel is rolling out a plan to attempt to turn things around. The goal is to get back to top performance, win back trust from stakeholders and set the company up for long-term stability and growth.

The latest 2025 Annual Report shows that Denel is making progress in several areas. They've gotten their main business back on track and are carefully rebuilding their base to become a reliable provider of important defence capabilities both at home and abroad. This was highlighted with the recent signing of an MoU with Embraer regarding the development of the KC-390 Millennium military transport aircraft.

Central to this transformation is Denel’s reinvigorating focus on building a strong order book by securing contracts from new and existing clients on the African continent and beyond. The company is doubling down on programme delivery to ensure reliable on-time execution that inspires confidence and fuels repeat business, which sadly has been lacking in the last decade. Such discipline, the company leadership believes, will form the basis for sustainable growth and a more vibrant future pipeline of projects.

Meanwhile, Denel ensures that it is keeping a close eye on its finances. They've revamped their working capital strategy to back new projects, protect cash flow and make sure they have enough funds for future growth. Plus, with their ICT systems getting a boost and better financial controls in place, the company is endeavouring to provide reliable and timely financial info, which is a major goal outlined in the 2025 report.

Over the past few years, independent audits have found some issues with internal controls, which worried stakeholders. To tackle this, Denel is teaming up with the Auditor-General of South Africa (AGSA) to roll out comprehensive fixes. They claim to have revamped their internal audit function and launched a strong new system to prevent fraud and corruption.

Denel claims to be rolling out lifestyle audits for top management, ramping up our internal governance standards and offering ethical leadership training to make sure these values reach every part of our organisation. The aim is to rebuild trust and ensure that integrity, transparency and accountability -three words not often associated with South African SOEs - are implemented across the board.

The revamped leadership team is now fully assembled. Denel has brought in highly skilled professionals in engineering, financial management, auditing, strategic business development and programme execution to guide the company through its last stage of restructuring and into a renewed future. These experienced experts will hopefully lead Denel back towards better performance, improved governance and increased competitiveness in the global defence market.

Denel is gearing up to succeed in a fast-changing tech world and shifting defence needs. The Board and top management agree that by streamlining operations, keeping a tight rein on finances, sticking to ethical practices and bringing in fresh leadership, the company will stay relevant and sustainable in a more competitive market.

Besides just making money, which would be a great improvement, Denel is dedicated to keeping South Africa's defence strong and independent. This mission is really important. By holding onto advanced tech, systems and platforms, Denel plays a big part in making sure the country is always ready and can make its own strategic choices, a key part of national security. The ongoing restructuring will better equip Denel to handle these duties, while also becoming more resilient and transparent in the process.

As Denel kicks off this new chapter, things are looking up: with better governance, financial stability, a fresh focus on getting things done and a leadership team ready to steer the company ahead, we hope that Denel can regain its once highly placed position in the international defence industry.